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Essay On Regulatory Competition

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However, is this concept of regulatory competition automatically a result of the legal structure of free movement in EU law, or is there a more subtle observation possible? To explore the latter, the model of harmonisation can be used to nuance the idea of automatic regulatory competition. To put this more starkly, having common rules within the European Union, established by either total or minimum harmonisation, relieves in some cases the economic incentive of regulatory competition. If European legislation sets a common standard, for instance in the sphere of environment, Member States are hindered in any attempt to compete in the race to the bottom. This race will eventually be halted to an end as a result of the European legislation,…show more content…
This is highly valued in Germany, relatively more than in the other Member States. However, if the UK, who does not hold the same value on this topic as Germany, would relax its legislation regarding employee participation in order to attract companies, it is “highly unlikely that Germany would also relax its employee participation requirement”. Naturally, this example can also be applied to a situation in which the UK would be reserved to relax its legislation, and Germany not. It serves as an illustration of the theory of “multifacety of variables” and as an argument why regulatory competition is not always automatic. Member States are sometimes unwilling to participate in regulatory competition, especially in the areas where its “core values” are highly respected. This unwillingness can stem from different reasons, both historical (the evolution of a nation’s system which is inherent in society) and political (the fear of political actors for an electoral backlash). Furthermore, if the applicable core value is widely supported throughout most of the Member States and can be described as an “European core value”, the resulted regulatory competition will be non-existing, or, more realistically, limited. In some cases, regulatory competition will therefore not happen automatically. It is more conditional, more dependent on social and political factors.

In conclusion, the idea that the legal structure of free movement in EU law automatically
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